All Forum Posts by: Matt Rutter

@Account Closed That's awesome to hear that videos are working well.  Do you use a regular phone camera walk through or is there a specific app you recommend?

Thought I would post this one the forum to see what the general opinion is.

We have a tenant whose lease is up at the end of April and we will not be renewing.

We've had a few renters interested in the apartment who have submitted applications. We coordinated with the tenant in advance about a showing this week, and received a message today that they would be more comfortable if we showed the apartment when they moved out given everything going on with the coronavirus. We're a husband and wife managing this and one other rental on our own and rely on monthly rent to cover the bills. While we understand the concern and want to be accommodating we can't afford to lose out on an entire months rent either. 

We are thinking of either A) letting them know we will be taking the necessary precautions to be safe and reduce exposure during a showing, or B) seeing if they can record a video tour, but it seems unlikely we'd rent it to someone sight unseen. 

How are other people handling these situations?

We've been using Tenet Cloud which has been very helpful! It's like Mint or Personal Capital. 

Even though it's just my wife and I with 2 properties it's hugely helpful doing things on the fly with their app. Plus they have reports for operating and taxes. 

This is extremely hard to do and I'm not sure what utilities you pay for today, but that is probably a good starting point.

In Cleveland, I typically estimate water & sewer to be about $50 per unit.  For minor repairs I estimate about 7% of income and the same for major repairs.  I also do about 5% of income for vacancy.

The key is that you use conservative numbers, and when I say that, I mean inflating your expenses at the high-end of things. This way you know a "worst case scenario" and whether it meets your minimum.  Anything better than the worst is the upside.

There's a lot of factors at play that make this hard to answer. 

The 44102 is such a large area, some properties at one end that can certainly attract high rents and others that can't. This is also a factor street by street. 

Most houses don't have central air or parking in this area due to the historic nature of the houses, but I would say in your case curb appeal, and not just of your property, places a very significant role in attracting desired rents. If a tenant isn't going to feel safe living on that street they are probably not willing to pay the higher side of things to live there. 

For perspective, we own a 2 unit rental in this area (3BR 1 BA) that needed some work. We've recently painted the front porch, we are fixing and updating things in unit as they are brought to our attention, and have bi-weekly lawn maintenance to make the exterior look welcoming. The tenant we inherited before we bought it pays $625 while the other tenant we placed pays $900. 

I've never used it before, but Tenant Cloud has a Market Report you can download that tells you all about the area and your surround property and presumably has rent info from their preview. You can also use Zillow Rental Manager and do searches for comps for bed and bath in your neighborhood and look at pictures to determine where your rents should be. 

Sorry for the delay!  We used one of those legal websites and here is the language we used with repayment specific to our situation.

Loan Agreement

Dated: __________

FOR VALUE RECEIVED, the undersigned, NAMES (the "Borrower"), located at ADDRESS, hereby promises to pay to the order of NAMES, (the "Lender"), located at ADDRESS, the principal sum of $XXXX together with annual interest of X% on the principal balance, and in accordance with the terms set forth below.

Payment. The principal amount of this Loan together with accrued and unpaid interest and all other charges, costs and expenses, is due and payable on or before DATE. The minimum principal amount due each year on or before DATE is $XXXX. All payments under this Agreement are applied first to accrued interest and then to the balance of the outstanding principal.

Prepayment. The Borrower has the right to prepay all or any part of the principal amount of this Loan, together with accrued and unpaid interest thereon, at any time without prepayment penalty or premium of any kind.

Costs and Fees. In the event of default, the Borrower shall pay to the Lender all costs of collection including reasonable attorney's fees.

Waiver. The Borrower and all sureties, guarantors and endorsers hereof, waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Loan.

Successors and Assigns. This Loan will inure to the benefit of and be binding on the respective successors and permitted assigns of the Borrower. The Borrower may not assign its rights or delegate its duties under this Loan without the Lender’s prior written consent.

Joint and Several Liability. If there is more than one Borrower of this Loan, the obligation of each Borrower shall be joint and several under this Loan.

Amendment. This Loan may be amended or modified only by a written agreement signed by the Borrower and Lender.

Severability. In the event that any of the provisions of this Loan are held to be invalid or unenforceable in whole or in part, the remaining provisions shall not be affected and shall continue to be valid and enforceable as though the invalid or unenforceable parts had not been included in this Loan.

Notifications. Any notice or communication under this Loan must be in writing and sent via one of the following options: Mail, Email.

Governing Law. This Loan shall be governed by and construed in accordance with the laws of Ohio.

IN WITNESS WHEREOF, the undersigned has executed this Loan Agreement as of the date first stated above.

________________________________________

Signature of Borrower / Date

________________________________________

Signature of Lender / Date

I've got a great contact over at FNB who is awesome and super responsive that  I have used for several properties.  Send me a message and I can get you her contact information.

Insurance is going to depend on many factors, including the age of your home and purchase price.  I would suggest reaching out to an agent to get a preliminary quote so you have a baseline. Guessing would be an extremely hard exercise.

Water + Sewer + Garbage are typically all included in one, and may depend on your location. With a SFH with washer, dryer, and dishwasher included you could be looking at around $50 for Water and $50 for Sewer conservatively. More amenities that require water will significantly increase your tenants water usage. Without those you might be more down in the $25-30/month for each conservatively.

Regardless, my rule of thumb is to use slightly higher estimates like the ones above because it allows you to observe a worst case return and allows you to determine whether the lowest is something you want to pursue. Any costs that come in shorter than what you expected simply provide you with a better return.

First National Bank recently started this service. Personally, I haven't borrowed as a LLC before since it was unavailable when I've needed loans, but I've been very happy with my experience with them and my contact over there.

Here's the link Bob was talking about - it's an amazing resource with a wealth of great info: https://myplace.cuyahogacounty.us/